This ‘Cargotecture’ company builds homes like plug-in Legos

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Katalina Klein hopes to address the shortage of available and affordable living spaces with shipping containers that are customized for backyard dwelling units seen in her Kubed Living showroom in Sierra Madre on Wednesday, April 11, 2018. (Photo by Sarah Reingewirtz, Pasadena Star-News/SCNG)

In their former life, they were loaded onto trucks, trains and cargo ships to transport everything from tennis shoes to furniture.

But Kubed Living is repurposing those steel shipping containers into tiny homes that can address a variety of needs, including Southern California’s shortage of affordable living space, households that need more room and families that want to rent them out for extra income.

The Sierra Madre-based company offers a variety of units that are customized and designed to fit easily into someone’s backyard. They range from simple home offices to full-scale living units.

Katalina Klein hopes to address the shortage of available and affordable living spaces with shipping containers that are customized for backyard dwelling units seen in her Kubed Living showroom in Sierra Madre on Wednesday, April 11, 2018. (Photo by Sarah Reingewirtz, Pasadena Star-News/SCNG)

Katalina Klein hopes to address the shortage of available and affordable living spaces with shipping containers that are customized for backyard dwelling units seen in her Kubed Living showroom in Sierra Madre on Wednesday, April 11, 2018. (Photo by Sarah Reingewirtz, Pasadena Star-News/SCNG)

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Katalina Klein hopes to address the shortage of available and affordable living spaces with shipping containers that are customized for backyard dwelling units seen in her Kubed Living showroom in Sierra Madre on Wednesday, April 11, 2018. (Photo by Sarah Reingewirtz, Pasadena Star-News/SCNG)

Katalina Klein hopes to address the shortage of available and affordable living spaces with shipping containers that are customized for backyard dwelling units seen in her Kubed Living showroom in Sierra Madre on Wednesday, April 11, 2018. (Photo by Sarah Reingewirtz, Pasadena Star-News/SCNG)

Katalina Klein hopes to address the shortage of available and affordable living spaces with shipping containers that are customized for backyard dwelling units seen in her Kubed Living showroom in Sierra Madre on Wednesday, April 11, 2018. (Photo by Sarah Reingewirtz, Pasadena Star-News/SCNG)

Katalina Klein hopes to address the shortage of available and affordable living spaces with shipping containers that are customized for backyard dwelling units seen in her Kubed Living showroom in Sierra Madre on Wednesday, April 11, 2018. (Photo by Sarah Reingewirtz, Pasadena Star-News/SCNG)

“We can put together as many as you want,” said company founder Katalina Klein. “That’s the beauty of these containers, it’s like playing with Legos. You just plug them in however you want.”

“Cargotecture”

She has dubbed the process “cargotecture.” But if you’re envisioning nothing more than corrugated steel rectangles with a few random pieces of furniture thrown in, you’d be wrong. These homes have a sleek and contemporary look with light colors, modern fixtures and a feeling of space that seems to defy their limited confines. And once the exterior of a unit is covered with stucco or wood, the transformation is complete.

Klein has a container home on display in her showroom at 47 E. Montecito Ave. in Sierra Madre. When fully assembled, the structure is made up of two 8-foot-by-20-foot containers totaling 320 square feet. But she has them broken apart to better display the customized features on each side.

One container has a stove, refrigerator and small countertop at one end, a central island with a dishwasher, sink and eating area in the middle and a couch and small coffee table at the far end. The other container has a full-sized bed, a closet and a bathroom with a glass-enclosed shower.

From $46,000 to $189,000

Klein, who owns a real estate brokerage, also in Sierra Madre, stressed that the units are easily configurable and come in all sizes.

“We have one floor plan that’s made up of three 40-foot containers,” she said. “It’s 960 square feet and it makes a really ample two-bedroom, two-bath home. It has a huge walk-in closet, a big bathroom and the kitchen is 8 feet by 16 feet.”

That model sells for $189,000, but the smaller versions are considerably cheaper. The 320-square-foot model is priced at $90,000, and a customized one-container unit of 160 square feet — a space that could easily function as an office or small workout facility — sells for $46,000.

Kubed Living has partnered with Sun Trust Bank to offer home improvement financing to approved borrowers with interest rates starting as low as 4.99 percent.

Klein said the customized homes have broad appeal.

“They’re great for people who want additional space,” she said. “Upward mobility in real estate is very difficult right now, so people are looking for an extra bedroom — or an office. You just plug one of these things into your backyard and suddenly you have an office. You might want to provide space for your elderly parents, or maybe your kids are returning from college. Rents are really high and they have students loans … they might never be able to afford a house.”

In Southern California, that may well be an understatement.

SoCal home prices are high

Figures from CoreLogic show the median price for a Southern California home — the price at the midpoint of all sales — was $506,750 in February. That was up 10.2 percent from a year earlier, and prices were considerably higher in some portions of the Southland.

Orange County’s median price rose 10.1 percent year-over-year to $710,000 in February and the median home price in Los Angeles County rose 10.5 percent to $580,000.

The rental picture is equally daunting. A recent study from industry tracker RENT Cafe revealed millennials pay a whopping $92,600 in rent by the time they turn 30, despite earning more than previous generations.

In light of those numbers, container homes could make sense. But homeowners who want to install one on their property should be aware that other costs are involved. City permits must be obtained to allow the structure, and a concrete foundation must be built to support it.

A forklift … or a crane?

Then there’s issue of getting it into the backyard. If enough space exists between the buyer’s home and their neighbor’s house the unit can be moved into place with a forklift. But if space is tight, a crane can lift the structure into the backyard. Both of those scenarios involve additional costs.

“The units are built in factories,” Klein said. “I use one factory in Texas and another in Canada. They do the cutouts for the doors and windows, and they also do all of the reinforcements because every time you cut out a section you have to reinforce or it loses its integrity.”

All of the finishes, including cabinets, closets and appliances are added on-site, Klein said.

Residents also need to be aware of regulations governing the units, which are often called “granny flats” but are officially considered accessory dwelling units.

Regulations vary

Under California legislation that took effect in January 2017, water and sewer agencies are prevented from charging hookup fees for ADUs built within an existing house or for an existing detached unit on the same lot.

Local agencies are likewise barred from imposing parking rules for certain ADUs, including units located within a half-mile from public transit or ADUs that are part of an existing primary residence. But cities still have their own individual rules governing ADUs.

Costa Mesa recently reduced the minimum lot size for accessory units in single-family areas to 7,900 square feet from 8,500 square feet. The city has also mandated that detached ADUs must be limited to 800 square feet and that each unit must have one dedicated parking space unless it is 400 square feet or smaller with no bedroom.

In Pasadena, the minimum lot size is 7,200 square feet. But the prospect of adding an ADU comes with a hefty price tag, as the homeowner is required to pay a $19,000 residential impact fee unless the structure is deemed an affordable unit or will be used for a family member.

The city limits ADUs to 800 square feet, or half the size of the primary residence, for residential lots of less than 10,000 square feet. Homeowners with bigger lots can add a secondary, detached unit of up to 1,200 square feet or half the size of their primary home.

“There has been a lot of conversation about ADUs, but I don’t see them being built in large numbers,” Tornek said. “I think most people still value their privacy. But some will do it because they may need to house a family member … maybe a grandmother or a child who can’t afford to live anywhere else.”

Kevin Smith handles business news and editing for the Southern California News Group, which includes 11 newspapers, websites and social media channels. He covers everything from employment, technology and housing to retail, corporate mergers and business-based apps. Kevin often writes stories that highlight the local impact of trends occurring nationwide. And the focus is always to shed light on why those issues matter to readers in Southern California.

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